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REPUBLIC OF THE PHILIPPINES


DEPARTMENT OF BUDGET AND MANAGEMENT
GEN. SOLANO ST., SAN MIGUEL, MANILA

NATIONAL BUDGET CIRCULAR

No.

568
January 5, 2017

TO

Heads of Departments, Agencies, State Universities and Colleges


(SUCs) and Other Offices of the National Government Including
Commissions/Offices under the Constitutional Fiscal Autonomy
Group (CFAG), Government-Owned or Controlled Corporations
(GOCCs); and All Others Concerned

SUBJECT

Implementation of the Second Tranche Compensation Adjustment for


Civilian Personnel, and Military and Uniformed Personnel in the
National Government

1.0 Background
Executive Order (EO) No. 201, s. 2016, entitled Modifying the Salary Schedule for
Civilian Government Personnel and Authorizing the Grant of Additional Benefits for Both
Civilian and Military and Uniformed Personnel" was signed by the President in accordance
with the authority vested in him under Presidential Decree (PD) No. 9851, PD No. 15972,
Republic Act (RA) No. 67583, and Congress Joint Resolution (JR) No. 44, s. 2009.
The issuance of EO No. 201 is consistent with the governing principle of the Compensation
and Position Classification System, as espoused under Congress JR No. 4, that
compensation of government personnel shall be generally comparable with those in the
private sector doing comparable work in order to attract, retain, and motivate a core of
competent civil servants.
EO No. 201 provided for a four-year (2016-2019) implementation of the compensation
adjustment.
2.0 Purpose
This Circular is issued to prescribe the guidelines, rules, and regulations for the
implementation of the second tranche compensation adjustment stipulated under
EO No. 201, s. 2016.

A Decree Revising the Position Classification and Compensation Systems in the National Government, and Integrating the Same
dated August 22, 1976
2 Further Rationalizing the System of Compensation and Position Classification in the National Government dated June 11, 1978
3 An Act Prescribing a Revised Compensation and Position Classification System in the Government and for Other Purposes
4 Joint Resolution Authorizing the President of the Philippines to Modify the Compensation and Position Classification System of
Civilian Personnel and the Base Pay Schedule of Military and Uniformed Personnel in the Government, and for Other Purposes
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3.0

Coverage
The following are covered by this Circular:
3.1

All positions for civilian personnel, whether regular, casual, or contractual in nature,
appointive or elective, full-time or part-time, now existing or hereafter created in
the Executive, Legislative and Judicial Branches, the Constitutional Commissions
and other Constitutional Offices, SUCs, and GOCCs covered by the Compensation
and Position Classification System (CPCS) under Republic Act (RA) No. 6758, as
amended by Congress Joint Resolution Nos. 1 and 4, series of 1994 and 2009,
respectively;

3.2

Military personnel under the Armed Forces of the Philippines, Department of


National Defense (DND) and uniformed personnel under the Philippine National
Police (PNP), Philippine Public Safety College (PPSC), Bureau of Fire Protection
(BFP), and Bureau of Jail Management and Penology (BJMP) of the Department
of the Interior and Local Government (DILG); Philippine Coast Guard (PCG) of the
Department of Transportation (DOTr); and National Mapping and Resource
Information Authority (NAMRIA) of the Department of Environment and Natural
Resources (DENR).

4.0 Exclusions
The following are excluded from the coverage of this Circular:
4.1

Government agencies, including GOCCs, that are exempted from RA No. 6758,
as amended, expressly provided in their respective enabling law or charter, and
are actually implementing their respective CPCS approved by the President of the
Philippines;

4.2

GOCCs covered by the CPCS established by the Governance Commission for


GOCCs and approved by the President of the Philippines, under RA No. 10149;
and

4.3

Those hired without employee-employer relationships and funded from nonPersonnel Services appropriations/budgets, as follows:
4.3.1 Consultants and experts hired for a limited period to perform specific
activities or services with expected outputs;
4.3.2 Laborers hired through job contracts (pakyaw) and those paid on piecework
basis;
4.3.3 Student workers and apprentices; and
4.3.4 Individuals and groups of people whose services are engaged through job
orders, contracts of service, or others similarly situated.

5.0 Second Tranche Monthly Salary Schedule for Civilian Personnel,


Effective January 1, 2017
The new salary rates shall be in accordance with the Second Tranche Monthly Salary
Schedule for Civilian Personnel under Section 3 of EO No. 201, attached as Annex "A."
5.1

Rules for Adjusting Salaries


5.1.1 The salaries of incumbent civilian personnel shall be adjusted to the rates
in the Salary Schedule in Annex "A" corresponding to the designated steps
of the salary grade allocations of their positions as of December 31, 2016,
provided that their positions and salary grades are in accordance with the
Index of Occupational Services, Occupational Groups, Classes, and Salary
Grades issued under Budget Circular No. 2006-3 dated May 17, 2006, and
the Index of Occupational Services attached to Corporate Compensation
Circular No. 10 dated February 15, 1999, and additions/modifications
thereto.
5.1.2 If the actual monthly basic salary of an incumbent as of December 31, 2016
falls between steps of the salary grade allocation of the position due to the
grant of service award or as a result of demotion or transfer due to the
exigency of the service, the salary shall be adjusted to the rate for the
higher step in the Salary Schedule in Annex "A."
5.1.3 If the actual monthly basic salary of an incumbent exceeds that for
Step 8 of the salary grade allocation of the position as of December 31,
2016:
5.1.3.1 The salary shall be adjusted to the rate for Step 8 of the salary
grade allocation of the position in the Salary Schedule in Annex
"A"; or
5.1.3.2 The employee shall not be entitled to salary increase if the actual
salary as of December 31, 2016 exceeds the rate for Step 8 of
the salary grade allocation of the position in the Salary Schedule
in Annex "A."
5.1.4 The salaries/wages of incumbent contractual/casual personnel as of
December 31, 2016 may be adjusted to the rates corresponding to Step 1
of the salary grade allocations of their positions in the salary schedule in
Annex "A" effective January 1, 2017. The adjusted daily wage rates of
casual personnel shall be computed by dividing the monthly rates by 22
work days per month.
5.1.5 Compulsory retirees whose services have been extended beyond
December 31, 2016 shall be entitled to salary increases effective January
1, 2017, following items 4.1.1 to 4.1.3 of this Circular, whichever is
applicable. However, their retirement benefits, including Terminal Leave
Benefits, shall be computed based on their monthly basic salaries as of
the day prior to the effectivity of their retirement, consistent with existing
laws, rules and regulations.

6.0

Second Tranche Provisional Allowance Schedule for Military and Uniformed


Personnel (MUP), Effective January 1, 2017
The Provisional Allowance for MUP shall be in accordance with the Second Tranche
Provisional Allowance Schedule for Military and Uniformed Personnel under Section 7 of
EO No. 201, attached as Annex "B".

7.0

6.1

The grant of Provisional Allowance shall be an interim measure pending the


modification and rationalization of the Base Pay Schedule of MUP.

6.2

The Provisional Allowance shall not form part of the base pay. Accordingly, the
grant of Provisional Allowance shall not increase the longevity pay, pension and
other collateral allowances which are indexed to the base pay.

Mid-Year Bonus for All Government Personnel


The Mid-Year Bonus equivalent to one (1) month basic salary as of May 15 shall be
granted to those who have rendered at least four (4) months of satisfactory service and
are still in the service as of same date, to be given not earlier than May 15 of every year.
The specific guidelines on the grant of the Mid-Year Bonus for FY 2017 shall be issued
separately by the Department of Budget and Management (DBM).

8.0

Productivity Enhancement Incentive (PEI) for All Government Personnel


The PEI in the amount of P5,000 shall be granted to qualified government personnel not
earlier than December 15 of every year.
The specific guidelines on the grant of the PEI for FY 2017 shall be issued separately by
the DBM.

9.0

Increase in Hazard Pay for MUP, Effective January 1, 2017


The Hazard Pay for all MUP for FY 2017 shall be increased from the current rate of P390
per month to P540 per month.

10.0 Second Tranche Officers' Allowance for Certain MUP Ranks, Effective January 1,
2017
The Officers' Allowance for certain ranks of MUP shall be in accordance with the Second
Tranche Officers' Allowance Schedule under Section 9 of EO No. 201, attached as Annex
"C".
10.1

Similar to the Provisional Allowance, the Officers' Allowance shall be an interim


measure pending the modification and rationalization of the Base Pay Schedule of
military and uniformed personnel.

10.2 The Officers' Allowance shall not form part of the base pay. Accordingly, the grant
of Officers' Allowance shall not increase the longevity pay, pension and other
collateral allowances which are indexed to the base pay.

11.0 Performance-Based Bonus (PBB) for Personnel of National Government Agencies


The PBB to be granted in FY 2017 based on FY 2016 performance shall be subject to
Memorandum Circular Nos. 2016-1 and 2016-2 dated May 12, 2016 and October 12,
2016, respectively, issued by the Inter-Agency Task Force created under Administrative
Order No. 25, series of 2011 (AO 25 IATF).
12.0 Implementation of the Second Tranche Salary Increase in GOCCs covered by the
CPCS under RA No. 6758, as amended
12.1 The implementation of the second tranche salary increase in GOCCs shall be as
determined by their respective governing boards. GOCCs which do not have
sufficient funds to implement fully the Salary Schedule in Annex "A" may adopt
their respective salary schedules at lower rates but at a uniform percentage of the
salaries in Annex "A".
12.2 In the formulation of such salary schedules, GOCCs shall ensure that they can
fund on a sustainable basis the increased salaries, including the government
counterpart to the Retirement and Life Insurance Premiums (RLIP), Pag-IBIG
Contributions, PhilHealth Contributions, and Employees Compensation Insurance
Premiums.
12.3 In the adjustment of the compensation of incumbent personnel effective not earlier
than January 1, 2017, the pertinent rules under this Circular shall apply.
13.0 Procedural Guidelines
13.1 Preparation of Notices of Salary Adjustment (NOSAs)
13.1.1 The Human Resource Management Officer (HRMO)/Administrative
Officer (AO) of a national government agency (NGA) or GOCC shall
prepare NOSAs for incumbent civilian personnel by following the format
marked as Annexes "D-1" or "D-2", whichever is applicable, for approval
by the Head of Agency.For personnel whose actual monthly salaries as of
December 31, 2016 exceed the rates corresponding to Step 8 of the salary
grade allocation of their positions in Annex "A," the HRMO/AO shall no
longer prepare NOSAs.
13.1.2 The NOSAs shall be issued to the personnel concerned, copy furnished
the Government Service Insurance System (GSIS) if they are members
thereof.
13.2 The salary adjustment under this Circular shall be subject to the usual accounting
and auditing rules and regulations, and to appropriate re-adjustment if found not in
order. The personnel concerned shall refund any overpayments received.
14.0 Fund Sources
14.1 The amounts required to implement the compensation adjustment and related
fixed expenditures for personnel in NGAs shall be charged against the respective
agency budgets authorized under RA No. 10924 or the FY 2017 General
Appropriations Act (GAA).
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14.2 For covered GOCCs, the amounts required shall be charged against their
approved corporate operating budgets (COBs), provided that the national
government shall not release funds for compensation adjustment or for any
compensation- related expenditures; provided, further, that the GOCCs shall not
resort to borrowings for the purpose; and provided, furthermore, that the
implementation of their programs/projects and attainment of performance targets
for the year are not adversely affected.
15.0 Release of Funds
15.1 The requirements for compensation adjustment for personnel of NGAs shall be
released pursuant to the GAA as Allotment Order chargeable against the
respective agency Personnel Services (PS) allotment under the FY 2017 GAA.
15.2 In case of deficiency, the agency may submit a request to the DBM for release of
funds charged to the MPBF.
16.0 Responsibilities of Agencies
Agencies shall be responsible for the proper implementation of the provisions of this
Circular. The responsible officers shall be held liable for any payment not in accordance
with the provisions hereof without prejudice to the refund by the employees concerned of
any excess or unauthorized payments.
17.0 Resolution of Cases
Cases not covered by the provisions of this Circular shall be referred to the DBM for
resolution.
18.0 Effectivity
This Circular shall take effect on January 1, 2017.

E. DIOKNO
Secretary

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Annex "A"
Second Tranche Monthly Salary Schedule for Civilian Personnel
of the National Government
Effective January 1, 2017
In Pesos
Salary
Grade
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

9,981
10,667
11,387
12,155
12,975
13,851
14,785
15,818
16,986
18,217
19,620
21,387
23,257
25,290
27,565
30,044
32,747
35,693
39,151
43,250
47,779
52,783
58,310
64,416
71,476
78,960
87,229
96,363
106,454
117,601
152,325
177,929
215,804

10,072
10,761
11,488
12,262
13,117
13,973
14,916
15,969
17,142
18,385
19,853
21,626
23,517
25,573
27,887
30,396
33,131
36,111
39,685
43,841
48,432
53,503
59,106
65,296
72,452
80,039
88,420
97,679
107,908
119,208
154,649
180,700
222,278

10,165
10,856
11,589
12,371
13,206
14,096
15,048
16,121
17,299
18,553
20,088
21,868
23,780
25,859
28,214
30,751
33,518
36,532
40,227
44,440
49,094
54,234
59,913
66,187
73,441
81,132
89,628
99,013
109,382
120,836
157,008
183,513

10,258
10,952
11,691
12,480
13,322
14,221
15,181
16,275
17,458
18,724
20,326
22,113
24,047
26,149
28,544
31,111
33,909
36,960
40,776
45,047
49,764
54,975
60,732
67,092
74,444
82,240
90,852
100,366
110,875
122,486
159,404
186,372

10,352
11,049
11,795
12,591
13,440
14,347
15,315
16,430
17,618
18,896
20,567
22,361
24,315
26,441
28,877
31,474
34,306
37,392
41,333
45,662
50,443
55,726
61,561
68,008
75,461
83,363
92,093
101,736
112,390
124,159
161,836
189,274

10,453
11,147
11,899
12,702
13,559
14,474
15,450
16,586
17,780
19,095
20,811
22,611
24,587
26,737
29,214
31,843
34,707
37,829
41,898
46,285
51,132
56,487
62,402
68,937
76,491
84,502
93,351
103,126
113,925
125,855
164,305
192,221

Step 7
10,543
11,245
12,004
12,814
13,679
14,602
15,587
16,744
17,943
19,244
21,058
22,864
24,863
27,036
29,557
32,215
35,113
38,272
42,470
46,917
51,831
57,258
63,255
69,878
77,536
85,657
94,625
104,534
115,481
127,573
166,812
195,215

Step 8
10,640
11,345
12,110
12,927
13,799
14,731
15,725
16,903
18,108
19,421
21,307
23,120
25,141
27,339
29,902
32,592
35,524
38,719
43,051
47,559
52,539
58,040
64,118
70,832
78,595
86,825
95,925
105,962
117,058
129,316
169,357
198,255

h.32- dift/ 7

Annex "B"
Second Tranche Provisional Allowance Schedule
for Military and Uniformed Personnel
Effective January 1, 2017
(In Pesos)
Monthly
Provisional
Allowance
547

DILG
DND

BJMP and BFP

PNP and PPSC

Fire/Jail Officer I

Police Officer I

PCG

NAMRIA

Apprentice
Seaman/Seaman
Third Class

Apprentice
Seaman/Seaman
Third Class

700

Seaman Second
Class

Seaman Second
Class

1,050

Seaman First
Class

Seaman First
Class

1,378

Petty Officer III

Petty Officer III

1,718

Petty Officer II

Petty Officer II

2,043

Petty Officer I

Petty Officer I

2,471

Chief Petty
Officer

2,954

Candidate Soldier
Private
Private First Class
Corporal

Fire/Jail Officer II

Police Officer H

Sergeant
Staff Sergeant

Fire/Jail Officer Ill

Police Officer III

Technical Sergeant
Master Sergeant

Senior Fire/Jail
Officer I

Senior Police
Officer I

Chief Petty Officer

Senior Master
Sergeant
Chief Master
Sergeant

Senior Fire/Jail
Officer II
Senior Fire/Jail
Officer III

Senior Police
Officer II
Senior Police
Officer III

Senior Chief Petty


Officer
Master Chief
Petty Officer

First Chief Master


Sergeant

Senior Fire/Jail
Officer IV

Senior Police
Officer IV

First Master Chief


Petty Officer

Cadet

Cadet

Cadet
Probationary
Second Lieutenant
Second Lieutenant
Inspector

Inspector

Captain

Senior Inspector

Senior Inspector

Major

Chief Inspector

Chief Inspector

Lieutenant Colonel

Superintendent

Superintendent

Senior
Superintendent
Chief
Superintendent
Director

Senior
Superintendent
Chief
Superintendent
Director

Brigadier General
Major General

3,500
4,331
5,547
5,547
5,547

First Lieutenant

Colonel

Senior Chief
Petty Officer
Master Chief
Petty Officer
First Master
Chief Petty
Officer

Lieutenant General

Deputy Director
General

General

Director General

7,030

Ensign
Lieutenant Junior
Grade
Lieutenant Senior
Grade
Lieutenant
Commander

Ensign
Lieutenant Junior
Grade
Lieutenant Senior
Grade
Lieutenant
Commander

Commander

Commander

15,228

Captain

Captain

18,016

Commodore

Commodore

21,189

Rear Admiral
Vice Admiral

Rear Admiral
Vice Admiral

24,795
28,198

Admiral

Admiral

31,221

8,661
10,652
12,533

35,260
,itzr,v

Annex "C"

Second Tranche Officers' Allowance Schedule


for Military and Uniformed Personnel
Effective January 1, 2017
(In Pesos)

DILG
DND

BJMP and BFP

PNP and
PPSC
Senior
Inspector

Captain

Senior Inspector

Major

Chief Inspector

Chief Inspector

Lieutenant
Colonel

Superintendent

Superintendent

Senior
Superintendent
Chief
Superintendent
Director

Senior
Superintendent
Chief
Superintendent
Director

Colonel
Brigadier
General
Major General
Lieutenant
General
General

Deputy
Director
General
Director
General

Monthly
Officers'
Allowance

PCG

NAMRIA

Lieutenant Senior
Grade
Lieutenant
Commander

Lieutenant Senior
Grade
Lieutenant
Commander

Commander

Commander

6,000

Captain

Captain

7,500

Commodore

Commodore

9,000

Rear Admiral
Vice Admiral

Rear Admiral
Vice Admiral

10,500
12,000

Admiral

Admiral

13,000

3,000
4,500

18,000

Annex "0-1"
For Regular Positions

Notice of Salary Adjustment


Date:

, implementing
dated
Pursuant to National Budget Circular No.
Executive Order No 201, s. 2016, your salary is hereby adjusted effective January 1, 2017, as
follows:
Adjusted monthly basic salary effective January 1, 2016, under the
new Salary Schedule; SG
, Step
Actual monthly basic salary as of December 31, 2016;
SG
Step
Monthly salary adjustment effective January 1, 2016 (1-2)

It is understood that this salary adjustment is subject to review and post-audit, and to
appropriate re-adjustment and refund if found not in order.

Very truly yours,

Head of Agency
Position Title:
Salary Grade:
Item No./Unique Item No., FY
and/or Plantilla of Personnel:

Personnel Services Itemization

Copy Furnished: GSIS

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Annex "D-2"

For Contractual/Casual Personnel

Notice of Salary/Wage Adjustment

Date:

, implementing
dated
Pursuant to National Budget Circular No.
Executive Order No 201, s. 2017, your salary/daily wage is hereby adjusted effective
as follows:
Monthly basic salary/daily wage rate
under the new Salary Schedule; SG
Actual monthly basic salary/daily wage rate
as of December 31, 2016;
SG
Monthly salary adjustment/Daily wage adjustment
(1-2)
effective

It is understood that this salary/wage adjustment is subject to review and post-audit, and to
appropriate re-adjustment and refund if found not in order.

Very truly yours,

Head of Agency
Position Title:
Salary Grade:
Copy Furnished: GSIS

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